Business confidence is apparently at the lowest level since 2012, due to concerns around Brexit in the UK, and further possible increases in global trade tariffs. So we need to find ways of digging deeper to deliver our performance targets.
One powerful way to improve performance and accelerate growth is to make use of innovations from fast growing ventures and start-up companies developing digital and other enabling technologies.
But taking advantage of innovations from ventures, in a way that makes a significant difference to performance, is by no means easy. From our experience of working with large utilities and energy companies, and with fast growing ventures, we have four insights to help make this happen.
A problem is a prize
The most successful venture companies have a strong focus on, and deep understanding of the problem they are trying to solve, or the opportunity they are aiming to exploit. This covers all aspects of innovation – technical developments, product development, access to markets, commercial value, human interactions and incentives, funding and cost management, policy context and how it can be shaped.
Incumbents need to change mind sets to see a problem as a prize. Problems, or opportunities are often “owned” by large incumbent companies such as utilities and oil companies. They understand the pain points – either theirs or those of their customers.
This understanding is a huge asset for incumbents but one that is often ignored and underappreciated. Targeting improvement programmes systematically to understand and value key problems that an incumbent owns is a great place to start.
Get ready first
There is little point in starting a programme of bringing in new technologies and ways of working and tackling high value problems unless the groundwork is in place. This means having a very clear vision of what you are trying to achieve, building alignment across the businesses unit and functions that need to be involved, and agreeing what success looks like for the customer, and yourself.
Getting ready also includes finding “safe spaces”, in terms of operations, geographies and business units to try things out.
We have seen all too many great ideas and technologies simply dissipate because key parts of the organisation is not ready to own and accept them.
Pilot, pilot, pilot
All too often we see plans for new technology or new businesses that have, somewhere in the middle, the setup and running of a pilot. This is typically preceded by a long period of analysis and followed by a detailed period of planning and preparing for global rollout.
Pilots are a mechanism through which companies and ventures collaborate and learn together. Ideally pilots should be developed and organised in an agile way – breaking down requirements into bite sized chunks, using cross-functional teams, being flexible with rapid decision-making, through plan-do-learn-act cycles.
We are great proponents of the agile business approach, with experience of having run a venture company operating an agile approach. One core element of the Agile method is the product owner who is the orchestrator of the development process knitting together the development team(s) and the stakeholders. We often find that venture companies have very weak product owner capability. This is another place where incumbents can provide value to venture companies, by reinforcing product ownership skills.
So run your pilots, run them rigorously, and make sure you build ownership of the outcome and the sustainability of the result.
You may well have a portfolio of venture company relationships and pilots. Managing this portfolio is often an art and a science. On the other hand, ultimately, a trading strategy is the right way to manage your overall portfolio of pilots: cut your losses early and let your profits (i.e. wining pilots) run.
Seizing the prize
Although we are great proponents of the agile approach, we are not one eyed about this.
So, once you’ve gone through the piloting process, established a stable solution and demonstrated scalable value, then its all about scaling and scaling fast.
Along with detailed planning will come the whole panoply of good change management: process re-engineering, appropriate organisational modifications (including incentives), skill building and transfer, stage gating, etc. The key here is to scale at pace.